@ Baltimore Aureole:

No problem, if rents raise developers will build more apartments. Oh, except that the supply of multifamily housing is artificially restricted because single family homeowners don't want "those people" moving into the apartments next door.

In a place like Phoenix or DC, I predict you'll end up with a lot of bank- or developer-owned condo conversions that will "convert" back to apartments. In NYC, you're screwed.

In Houston, we don't have a problem. The housing bubble never got as hot here (because there's no zoning) and now that it's popped we're seeing an uptick in new apartment construction (because there's no zoning). The 'burbanites are, for the most part, staying out in the 'burbs.